CCS Food Cost Management & Pricing 3 — Questions and Answers
Question 1: A restaurant wants a 28% food cost. If an entrée costs $8.40 to produce, what should its menu price be?
- $25.00
- $30.00 (Correct answer)
- $23.52
- $35.00
Correct answer: $30.00
Menu price = food cost / food cost % = $8.40 / 0.28 = $30.00.
Question 2: Which type of menu analysis classifies items by both popularity and profitability?
- Break-even analysis
- Menu engineering (Correct answer)
- Cost-volume-profit analysis
- ABC inventory analysis
Correct answer: Menu engineering
Menu engineering evaluates each menu item on two dimensions—popularity (number sold) and profitability (contribution margin).
Question 3: When performing a standardized recipe cost analysis, why is it important to include a 'miscellaneous' or 'spice factor'?
- To account for over-portioning by staff
- To cover small-cost items like salt, pepper, and garnishes that are impractical to measure individually (Correct answer)
- To budget for equipment depreciation
- To compensate for food waste during service
Correct answer: To cover small-cost items like salt, pepper, and garnishes that are impractical to measure individually
A miscellaneous or spice factor (typically 3–5% of total recipe cost) covers minor ingredients too small to cost individually.
Question 4: A pastry shop produces 240 croissants from a batch that costs $120 in ingredients. If 12 are discarded due to quality issues, what is the actual cost per sellable croissant?
- $0.50
- $0.52 (Correct answer)
- $0.54
- $0.48
Correct answer: $0.52
Sellable units = 240 − 12 = 228; cost per unit = $120 / 228 ≈ $0.526, rounded to $0.52.
Question 5: Which of the following best represents a 'fixed cost' in a foodservice operation?
- Cost of ingredients for daily specials
- Monthly lease payment for the restaurant space (Correct answer)
- Labor cost for part-time servers hired based on reservations
- Disposable takeout containers purchased weekly
Correct answer: Monthly lease payment for the restaurant space
Fixed costs remain constant regardless of sales volume; a monthly lease is the same whether the restaurant is busy or slow.
Question 6: In the context of purchasing, what does 'economic order quantity' (EOQ) help a foodservice operator determine?
- The maximum storage capacity for dry goods
- The optimal order size that minimizes total ordering and holding costs (Correct answer)
- The reorder point based on lead time
- The vendor with the lowest unit price
Correct answer: The optimal order size that minimizes total ordering and holding costs
EOQ calculates the order quantity that balances the cost of placing orders against the cost of holding inventory.
Question 7: A soup recipe yields 2 gallons and costs $16 to produce. If each serving is 8 oz, what is the food cost per serving?
- $0.25
- $0.50 (Correct answer)
- $0.75
- $1.00
Correct answer: $0.50
2 gallons = 256 oz; servings = 256 / 8 = 32; cost per serving = $16 / 32 = $0.50.
CCS Food Cost Management & Pricing 3
A restaurant wants a 28% food cost.
If an entrée costs $8.40 to produce, what should its menu price be?